Top Advisors Corner

March 2018

Top Advisors Corner

How To Prosper During These Volatile Markets - Three Keys To Keep You In The Game

by Mary Ellen McGonagle

It’s been a wild ride for investors over the last 2 months as the markets have gyrated on a regular basis.  In fact, the widely watched VIX – better known as the Volatility Index – has just posted its biggest quarterly rise since the 3rd quarter of 2011. During that time, there was a downgrade of U.S. credit as well as worries about Europe’s debt-crisis jitters. And while there are many possible reasons for this increase in volatility today, many professional traders think it’s here to stay – for a while anyway.  For those not familiar, the VIX reflects option traders’ Read More 

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Tom McClellan: What Really Drives the Arms Index

by Tom McClellan

 Earlier this month, the technical analysis community mourned the passing of Richard Arms, the creator of the eponymous Arms Index.  You can read an obituary by Jonathan Arter here.  I met him a few years ago and had corresponded with him, and I can tell you that he was not only a brilliant chartist, he was also a really nice guy.  He was happy to share his insights with others.  The Arms Index is sometimes referred to as “TRIN”, short for TRading INdex.  TRIN was the old Reuters screen code, and it is the symbol many quote Read More 

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David Keller: Taking the 200-Day Temperature

by David Keller

I show the 200-day moving average on about 90% of my charts.  I do so not because of its incredible predictive power, but more because it tells me the overall trend.  By smoothing out 200 days of closing prices, I can minimize the noise of the daily volatility and focus on the long-term trends. A brief review of the 200-day moving averages shows that while the S&P 500 has remained above this long-term barometer, many stocks and sectors have already broken down. The S&P 500 index tested its 200-day moving average in early February during the first downward Read More 

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Tom McClellan: Crude Oil Swooping Up On Schedule

by Tom McClellan

 The movements of gold prices lead similar movements in crude oil about 20 months later.  So if you watch what gold has already done, you can see the script for what oil prices are going to do. It does not work perfectly; it is merely amazing, not perfect.  Crude oil prices had a brief swoon, dipping to $59/barrel in early February.  That matched a brief dip in gold prices 20 months earlier in May 2016.  Now oil prices are recovering, just as gold recovered to its July 2016 top.  But the recovery in oil prices should only be a brief one, as gold’s chart Read More 

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Tom McClellan: High Grade Bond Summation Index Oversold

by Tom McClellan

March 14, 2018  The world was convinced that inflation was imminent, that bond yields were rising, and thus that investors ought to dump anything bond related.  The 10-year T-Note was assuredly headed north of 3%, people were going to stop taking out mortgages, companies were going to stop investing, and inflation was going to be the “new normal”.  But wait!  That sentiment appears to have been overdone, and bond prices got oversold.  We can measure the oversold condition of T-Bond prices in a large variety of ways, but this week’s chart Read More 

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Mary Ellen McGonagle: Let Next Cycle's Winners Reveal Themselves To You Now.

by Mary Ellen McGonagle

Studying Action Beneath Markets Surface During A Correction Will Set You Up For Success Once Market Pressures Subside. I’ve been closely following the markets for over 25 years now with my largest stretch taking place while working with top fund managers around the world. That is to say, I’ve seen my fair share of boom and bust cycles and while the current market correction has given us the most volatile month (February) since 2008, there are underlying dynamics taking place that can historically point you to the next cycle’s winners. As stated in my most Read More 

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Tom McClellan: A Follow-Up On 3 Charts

by Tom McClellan

We are at a fascinating turning point in the market’s path, and it is worth reviewing some recent Chart In Focus stories to see how they turned out, and to look at what might lie ahead.  I usually refrain from doing reruns, but in each case there is new information that I find interesting, and which I have already shared with our McClellan Market Report and Daily Edition subscribers.  I hope you will find them interesting too.  So here goes.  Back on Feb. 15, I wrote about “Stock Market In a Rogue Wave”.  Rogue waves are a rare and Read More 

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Scott Carney: Steel is the Real Deal

by Scott Carney

With the recent news about tariffs on imports, US steel stocks may benefit over the long run. Currently, the news situation has a market catalyst to send US steelmakers there. Companies such as X and AKS have stabilized over the past year and exhibited signs of structural recovery. Although I focus less attention on news items and analyze harmonic M and W-type price patterns to define opportunities, the recent surge of price action has triggered key levels that indicate there is more to the story than a single headline. US Steel (X): Weekly Failed Bearish Bat Read More 

Top Advisors Corner

Tom McClellan: It's the Fed, Yanking The Punchbowl

by Tom McClellan

March 02, 2018 We were having a perfectly nice low-volatility uptrend until Jan. 26, and everyone was happy.  Since then, the inverse VIX ETN known as XIV has blown up (a great case of a “burning LOH” marker), and traders are starting to remember that stock prices actually can go down.  So why now? As with most bear markets and recessions, the blame goes to the Federal Reserve, which decided last year that it would start unwinding all of the QE buying of T-Bonds and Mortgage Backed Securities (MBS) that it had bought up from 2009-14.  Last year, the Read More